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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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Us 20, Washington 12, America 7, S&p 6, Mitch Mcconnell 6, Mccain 3, Maria Bartiromo 3, John 3, U.s. 3, Unitedhealthcare 2, Dell 2, Hp 2, Griffith 2, Brad Fredelander 2, Mya 2, Michael Burgess 2, John Mccain 2, Rodger 2, Chantix 2, John Harwood 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    December 31, 2012
    3:00 - 4:00pm EST  

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the dow is at a high for the session. nearly. up 136 points. all are higher. we've got a deal on taxes. we've got a few kinks to work out but they are quote, very, very close to a deal. tune in tonight 6:00 to 7:00 p.m. live for coverage of the fiscal cliff. myself and a cast of thousands with your latest as we count down toward the end of the year. "closing bell" coming up next. could be a big final hour of trading. bill griffith and an australian woman hosting the next hour. stay tuned anyway.
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yeah. hang on, kids. here we go. welcome to "closing bell." i'm bill griffith. >> and i'm the australian woman. i'm mandy back at cnbc's world headquarters standing in for maria bartiromo. here we go, folks. stap yourself in. last trading hour for the whole year. the fiscal cliff, there may be a merge. we'll bring more on that. >> take a look at the charts. this tells the story in the last few minutes with mitch mcconnell on the floor saying that we are very, very close. we'll get more details from john harwood in a moment, but right now the markets are voting and they're giving thumbs up with the dow up 138 points. nasdaq up 2% right now. it's been strong all day. now at 3,020. and the s&p up 1.5%. >> look at those stocks go. president obama saying a fiscal
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cliff agreement is quote, in sight. mitch mcconnell moments ago saying quote, we are very, very close. >> to d.c. and john harwood. he and eamon have been monitoring all day. why are we close but not there yet? what's left, john? >> what's left is the agreement between the two parties on delaying those automatic across the board defense and domestic budget cuts which nobody wants. they deliberately set up so they wouldn't take place. democrats want to defer those for a year. republicans say we're only going to put them off to the extent you can find budget cuts that match the amount that the sequester would have been. now, the republicans are offering two or three months, 60 or 90 days and suggesting cuts. but democrats have not agreed to that. which is why the deal has been held up. even though the main portions of the tax element have fallen into place. and i'll recap what those are.
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a higher clinton era top rate of 39.6% for individuals above $400,000 income, couples above $450,000 income. capital gains and dividend rates going from 15% to 20% for people in the top income brackets. you've got an estate tax that goes from 35% to 40% for estates valued at over $5 million. you've got a phaseout of deductions and tax credits at incomes above $250,000 for individuals, $300,000 for couples. that is a concession for the president. and our colleague steve leisman has been also doing reporting on this. he just spoke to me by phone as i was preparing to go on with a source familiar with the talks who noted a wind energy tax credit is preserved as the president eluded to in his
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remarks. also depreciation for businesses with spending money on new equipment. all of those things arement wills of the tax deal, but until they get the sequester, the budget elements worked out, the deal's not going to be finished. >> now, the deduction phaseout. this is relatively new. any idea at this point which deductions we're talking about and any timetable for them? >> i have to confess, bill, i don't know how exactly that works. these are provisions that were first initiated in the 1990s as a way of getting more revenue from people at the top without raising their rates. so what you do is you take the same deductions that other people can take and you limit their value over a certain income level. this is in addition to something the president's proposed of making the tax deductions for people above a certain income level valued only at a lower percentage tax rate than the
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39.6% rate. we'll see how all of these things mesh and how they're implemented ultimately. but it's a way of getting money from people below the $400,000 threshold. >> we'll get back to you shortly. >> i've got one more question. i hear maybe republicans want that to come down in exchange for allowing any increase on the higher income individuals. >> i think the republicans have given up the ghost on that issue because it's republicans who have been pushing the idea that this is all buttoned up and it's why mcconnell says let's vote on this now without the sequester. democrats are resisting that and i expect they will continue to until there's an accommodation reached. >> i'm sure you'll continue to monitor it for us. we'll get back to you when there's something new to know. in the meantime, what are you supposed to do as an investor? we saw how the dow really swung during the president's speech. we saw the spike up and came
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back down and now we're seeing it through the day. why don't we bring in our cast of thousands here. ben willis, jason milly, brad fredelander, and of course rick santel santelli. ben let me get to you first of all. what do you feel this means beyond just the market moves today, the emerging deal what does it mean for the markets once we crack into the new year? >> we knew they could do it, it just took a long embarrassing cost of our reputation in the world to get it done. with that being said, i think you mentioned the capping on the tax deductions. you want to keep an eye on the high end housing and the high end buildings. if that does come to fruition. but the whole tape is moving. apple in and of itself is moving the nasdaq today. that may be a function of the idea of the continuation of the
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tax benefits for writeoff in the business sector. people investing, businesses investing in technology to grow their business. so that would be the area that i think you're seeing the greatest impact. but the whole market is moving. the building stones of an economy, the basic material groups and the consumer spending is what is moving this market right now. >> jason lilly, based on what we know right now about the various details of what they're talking about in washington, you've liked stocks anyway. is this framework they're talking about a green light to buy stocks for you? >> it is. yes. we were pretty optimistic going into 2013. this just improves the outlook. >> in what way? how? >> well, i think some finality around where taxes are going to be is going to be very, very helpful. we can manage around the different tax rates in terms of capital gains issues and whatnot within portfolio locations. so knowing what those rates are
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going to be in managing around that will be helpful. stocks right now attractive from a valuation standpoint. i think it'll be a good 2013. >> brad fredelander, you have been skeptical of the market. does this deal help, do you think? >> well, it's certainly good news. i think -- i do have some concern that the market es at this point are in more fiscal harmony than the discord we've been seeing. we still have within six to eight weeks the debt limit issues as well. so i think there are going to be some hurdles early in the year and it will be volatile. we will get past that. >> rick santelli, i manage to a certain degree there's a relief rally going on here that it looks like we're not going over the cliff. let's cross our fingers. but from what we know about the deal being formed now, is it going to be good for business? is it going to be good for the markets and investors? or do you still have concerns?
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>> i don't have concerns. i think that it will cause compression. i think you're going to see smaller gains in the equities. i think you're going to see gains nonetheless in the fixed income market because i don't see how any of this is going to really help the economy to grow any better. so i think a compression year for investing. and i'll take it a step farther. if it ends up being more than 60 days on some of the reform issues as we're just listening to, maybe push it out to a year, i think that would be down right negative for the markets. but it's all relative. what's negative for the equity markets? remember, there's a lot of fire hosing to keep it going up. i think it's going to go up at a slower rate. >> why do you think gold is going up, rick? >>. >> i think it's probably a bit of a year-end event. i do think gold and some extent apple and a lot of commodities probably experience the kind of nervousness about tax changes, but i also think there's some
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large, famous hedge funds we know of that have large positions in gold which for the most part may be liquidated. >> ben what are you doing right now today and going into the new year? >> i want to keep exposure in the equities. my biggest concern is rate risk on the upside. >> let me ask brad fredelander this question. the fact they're talking about cap gains originally the thought is it woul go to the income level, maybe 39%. now they're talking 20%, much lower than that. does that make equities more attractive in your view? >> i think it does. not an argument there. one thought as well with the fed, i wouldn't want to be in their position as well just when you think about the confidence and the fact they do need a counteract a lot of the confidence breakdown that's really existed here over the last several months.
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but certainly that is better news than the market was expecting. so it can only be helpful. >> jason, what are you doing for 2013? >> we're continuing to keep a balanced approach. we do like equities. we do see fixed income as an area that probably won't sustain the gains that we've seen over the last three to five years. but, you know, yields around the ten year treasury where it's yielding right now plus or minus a percent or so. so we're not reducing our weight on fixed income sides, we're just more optimistic on the equity side of things. but everything in moderation. >> brad, we didn't ask you. are you doing for the new year? >> well, we like to eliminate the guess work. housing. so during these periods of uncertainty, i'd rather be clipping coupon and earning between 5% and 7% yields.
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so non-agency portion of the mortgage backed securities is most interestous. i wouldn't peg myself as too skeptical, but i think you do want to take some moderate degree of credit risk. it's worked this year. i think it'll work next year. >> last question to benton, will this last? >> i think it lasts. we're petering out just because of the washington stepping in front of the microphone. we hate that down here. but i think this rally lasts. >> we certainly hope so. gentlemen, thank you for joining us. we're counting down to the "closing bell." it is the final trading hour of 2012. the dow is currently to the upside keeping its rally going here on the hopes that we do finally get a deal before we move over to 2013. after the break we've got two capitol hill major players to break down what's happening right now in this eleventh hour of negotiations. and then later maria bartiromo will join us with some new details that she's learning from sources inside washington as well.
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plus bank of america more than doubled the returns of the next best performing dow stock this year. while hp was the biggest loser. will those trends continue next year? or can you expect a reversal of fortune? and we're not finished. after the bell, former dnc chairman howard dean has repeatedly said let's go full speed over the fiscal cliff if we get this deal. does he like it or not? he'll join us coming up. much more to come. don't go anywhere. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying...
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if you're just joining us, the negotiations in washington continue. and we have learned that both sides apparently have agreed to the increase tax increase raising the level on upper income earners of about $400,000 for individuals, $450,000 for couples. that apparently is in the offing right now. even with those new details, republican congressman tim kuhl's camp of kansas is still outspoken on his view that there should be no tax increases for anyone when it comes to this final deal.
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>> we also have mcginnis who had the fix the debt campaign. he said any small deal fixes almost nothing. they both join us now for they reaction. mya, to you first, always ladies first here on cnbc. your organization fix the debt, do you believe this is going to do the trick? or does this fall into the camp of what you call a small deal? >> yeah. there's no question that this is discouraging where we're headed. the good news is that if we don't go off the cliff, that's preferable. going off the cliff would have been bad for the economy and likely put us back in recession. but if you know that saying that the country is one big debt deal away from being a great nation again, it does not appear that greatness is in the immediate future for us. this is just once again sort of the sad end of the year fiscal grab bag that you see out of congress where they're still not willing to come together and
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make the hard choices that we need to look at on cutting spending, reform entitlements to stabilize the debt. this is such a lost opportunity. it's really a shame. >> congressman kuhl, we welcome you. i want to get your reaction to this. here's what he said on taxes. >> if republicans think that i will finish the job of deficit reduction through spending cuts alone without asking also equivalent sacrifice from millionaires or companies with a lot of lobbiesists, et cetera. if they think that's how we'll solve this, they've got another thing coming. >> from what we hear the senate republicans have gone along with a tax increase. i can imagine what the president said and what they're talking about is not pleasing to you. >> well, looks like another
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washington deal and not a fair deal. we've got spending problems. we've got entitlement problems. senate republicans have agreed to tax increases, then i think we're missing out on the real part of the package we need to have. that's dealing with a spending problem. >> would you vote for a deal with these tax increases? >> no, i don't think so. when i look at those numbers, we're still trying to sort through those. it looks like at least a million small businesses will see taxes increase. i have yet to see any small business owner that says you increase my taxes, i'm going to grow the economy, i'm going to hire more people. we suppose we want to be about growth and jobs. these taxes don't create jobs. we need to most importantly look at the spending side. i'm disappointed if they agreed to raise taxes and they will also undo the spending cuts.
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>> there are others like you not voting for it because we don't want to see taxes go up and essentially we go over the fiscal cliff, are you saying you would rather go over the fiscal cliff than vote for tax hikes? do you think it's going to get past the house? >> i don't know if it will pass the house. and the president seems intransigent. he seemed put off on having to be back in washington, d.c. off his hawaiian vacation. but at the end of the day i think there'll be some washington deal that will raise taxes at a level that won't help jobs. the president didn't want to do the spending cuts side and just raise taxes. and that is just a deal. it's not a solution in my book. >> where do woe go from here, mya, to get what you would want as a solution? what next? >> i do think this is a lost opportunity on two fronts. that we're not replacing the fiscal cliff with a big comprehensive debt deal that
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would actually fix the problem. and it's a lost opportunity that we seem to be back in washington the same old finger pointing and blame game. and right after the election, i really was hopeful that members of congress would be able to come together and work out these hard issues. we're not there yet, but the fight's not over in that these debt problems are still there facing us. we'll have to go back to january and get into entitlement reform. the job is not close to finished. whatever debt deal they pass today, they agree they come back as quickly as possible and work out these challenges. because the economy will not grow in any meaningful way until we add the stability and certainty of tackling challenges. >> with all due respect, did upg the 112th congress was going to come together on a grand bargaining? >> i was hopeful. leadership starts at the top. i haven't seen much leadership in this town. one thing that happens at the end of the day is we go crashing through this debt ceiling which to me represents the real issue,
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the real fundamental challenge is we're running $1.3 trillion deficits, been doing that for two or three or four years. these taxes will not change the problem. the real issue we've got is a trillion dollars. we're off from getting to fixing the deficit problem. and that's why i think again this is a missed opportunity. if this is where we end up at the oend the day or the end of the week. >> it is very easy for us to criticize, right? it's easy to criticize politicians. if you look at it from the politicians' point of view, and i'm not necessarily support k them, i'm just saying they need to be elected. who's going to have the real guts to stand up and make those tough decisions on whether it's the deficit or spending or whatever. who's going to make those tough decisions? >> you're absolutely right. when i've done town hall meetings, you get a sense how hard this is. they go out and are greeted by people saying do it my way. but there's another group of
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people and that's what the fix the debt campaign has tried to bring to the discussion which is there's a whole lot of people who are tired of the blame game in washington. and actually do understand that these tough choices we have to put in place to deal with the deficit and debt are the right thing to do. and we're willing to say we're willing to pay more in taxes and have spending cuts and reform entitlements if you work together and put in place a plan that fixes the problem. fix the debt at least wants them to work together and make the hard choices. we will support that instead of lobbying against it for all the special interests who have been dominating. >> last comment to you. >> i've done 140 town halls in the last two years will real americans. what they tell us it's not a taxes problem, it's a spending problem. there are a few people saying raise my taxes as long as it goes to reduce the deficit. but when i say we're still
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running trillion dollar deficits they're saying we'll cut programs. people in washington don't want to cut programs especially their own. real americans say we need serious entitlement reform. but the president is dead set against that. that's the problem here. long-term we've got to deal with entitlements. i don't think this deal would touch those at all. that is a serious problem that i think threatens the financial stability of our nation. >> all right. we appreciate your thoughts, folks. thank you very much. happy new year. >> you too. thank you. we are heading towards the close. and about 35 minutes left. we continue to come off those highs. the dow was up 150 points at the peak. now a gain of 106 right now. >> we're sitting above the 13,000 mark. that's the level to watch. whether we can close out the year above that mark. still ahead, what's going to happen in the worlds of tech in 2013? we've got predictions that might shock you like who might buy
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netflix. also the five-year drop is truly ugly, but bank of america has been a agreement investment this year. should you stay with it for 2013 or will the biggest dog of the dow this year reverse fortunes next year? we'll talk about that coming up. and we're also counting down the top five songs downloaded on itunes this year. this, guys, is number five. "starships" by nicki minaj. if i hear it one more time, i don't know what i'm going to do. i hear it all the time. >> i've got this on my ipod. ♪
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♪ okay. let's take a look at what is happening with the markets right now. it looks as if the markets are coming off their highs of the day. as it does look as if we've got the contours of the deal emerging right now. obviously we've got to finally get the pass and make sure we avert the deadline at the end of today. at this stage the dow is currently up by 92 points. the nasdaq up by 46 and the s&p with a gain over 1%. let's get back to bill at the new york stock exchange. >> check one, two.
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check one, two. hello, cleveland. you got me there? >> this is the beauty of live tv. >> yes, it is. it's the burden and beauty. the dogs of the dow strategy holds that the worst performing dow component one year will be next year's star. and it worked this year. bank of america in 2011 was the dow's worst performer. and this year it was the best performer. so is that a reason to buy this year's worst performer? that would be hewlett-packard. or should you stick with what's working? let's talk about that on talking numbers. it's carter worth and jeff tomasulo. gentlemen, good to see you and hear you i hope as well. carter, what do you think? you still with b of a? do you like hp as a darling for next year? what do you think? >> no. stick with b of a. if these are stable companies and if you can get one at its business trough low, you profit off its low.
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but that's only in effect if a business isn't being made obsolete. that's the issue with something like a hewlett-packard. it's not just catching a cord and twine company at its low which then becomes the new winner the following year. or the financial in the case of b of a last year. we would not step in and apply the dog of the dow theory here and apply it. >> but jeff, you don't like b of a do you? >> no. and i'm going to agree with carter. stay away from hpq. b of a is up 108%. now, the smart money is going to rotate out of bank of america and look to go into the stronger fundamental stocks in that sector like a jpmorgan. right now bank of america is trading at 12 times, jpmorgan at 8 times future earnings.
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wait. jpmorgan has a 3% dividend. bank of america has given us barely anything right now. >> those are all quite valuable. i think rotating out of bac going into a financial other type but equal quality, so to speak, makes a lot of sense. but i think as it goes, the dow herery here or the implication of buying the dogs of the dow is not going to work presumptively in 2013. >> and you agree, too, jeff, huh? >> absolutely with hpq. listen. carter said it. they're in a dying business. and the businesses that they're in, they're not leading. if you're not leading, that's a recipe for underperforming. >> let me ask you both very quickly. last year if we were standing here, would either of you said that you thought b of a would have been the best performing dow this year? >> no way. >> jeff? >> absolutely not. >> your honor, i rest my case. happy new year, guys.
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>> happy new year, bill. >> thanks very much. we're still sitting up by nearly 100 points on the dow. president obama earlier on today saying it does appear a deal on the fiscal cliff is nearing. it is within sight. obviously a bit of work still to be done here. even mitch mcconnell says we are very, very close. so the markets have moved up on that hope we will get a done deal and avert the fiscal cliff. positioning portfolios for the new year, i can majs is tricky right now. there's a lot of mess going on in d.c. we're going to help. we're going to give you the single best play for 2013. and also next, two congressman, one democrat one republican. they're going to talk to us about the fiscal cliff. are they happy or sad? and can they rise above to get a deal done? "closing bell" will be back after this break. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.
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we're getting ever closer to midnight. ticktock, ticktock. despite encouraging signs, there's still no final fiscal cliff deal. e mamon javers is on capitol hi
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working the phones. what are you hearing about the president's remarks we heard earlier where he promised to puch more more revenues later on. i would imagine it would have rankled a few republicans. >> that's right. john mccain said he was upset the president took to strong tone in his remarks today. he said it was not helpful to the negotiations going on here at the capitol. but then we had mitch mcconnell go to the senate floor and propose something unexpected and interesting. take a listen here to exactly what mitch mcconnell had to say. >> let's pass the tax relief portion now. let's take what's been agreed to and get moving. we'll continue to work on finding smarter ways to cut spending. but let's not let that hold up protecting americans from the tax hike that will take place in about ten hours. >> now, that comment had eyebrows raised all across
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capitol hill as people said wait a second, what's mcconnell doing supporting separating the tax negotiations from the cuts negotiations? what you can look at this is a negotiation tactic. the tax deal appears now to be finished in terms of negotiations. so they're working on sequester. mcconnell saying basically in what we can think of as a bluff. look, we will just simply go ahead with the sequester. have those spending cuts happen and we'll take this tax deal. what do you say, democrats? it's a move, we think, designed to put pressure on the democrats here in order to get them to come to a deal on the sequester as they're negotiating behind the scenes. he's going out public pli saying we'll take what we got right now. so a lot of moving parts here. a lot of three level chess going on. >> i'll take it here because we do want to get reaction from both sides. once it gets out of the senate, it's got to go to the house. we want to hear from a democratic congressman peter
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welch and then michael burgess will join us after that. thank you for joining us today, sir. what about this issue of this sequestration? it sounds like the tax portion is coming together in the senate there. but they're talking about delaying the sequestration, the republicans want to delay it three months. the democrats we hear want to go much longer than that. maybe a year, maybe even longer. what would you accept, sir? >> well, it's got to be longer. if we're breaking this out, basically we're giving up a lot of revenue. the democrats think this is the one moment we can get revenues to be a serious component of a balanced deal. and if we've gone from $1.6 trillion to $106 billion. that's a real retreat. then if we face the debt ceiling leverage to subtract cuts that we think would be bad for the economy, that's not an ideal situation. so there's going to be a lot of discussion on our side once we know what the details are. >> do you think that the tax package as it stands right now,
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39.6% on incomes of $450,000, cap gains at 20%, the estate tax at $5 million at 40%. does that pass the house, do you think? >> it really is going to depend on whether it deals with the cut side as well. because the democrats want to get some revenues. and the president's got leverage. this is the last moment he'll have that leverage. things will change on january 1st. i think a lot of democrats would support the president making some reasonable compromise if it included debt ceiling and cuts. the revenues, debt ceiling, and cuts. >> i would like, sir, to get you to listen just quickly to what senator john mccain had to say in response to some of the things president obama said earlier on today with regards to the fiscal cliff. let's just take a listen. >> i'm not sure yet as i sort
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out my impressions of the president's remarks as to whether to be angry or to be saddened. i guess i have to wonder -- and i think the american have to wonder whether the president really wants this issue resolved or is it to his short-term political benefit for us to go over the cliff? >> what is your response to that? whether or not it's to his benefit or whether he really wants to get this job done? >> well, i think his commentary, senator mccain's, is part of the whole theatrics. he probably had a meeting with mitch mcconnell five minutes before he went on the floor and scripted out what he was going to say with hopes it would create leverage on their side. i think that's kind of a sideshow. mccain has the pulpit. but i really think the real question here is whether or not this deal is balanced, it's durable, and if we consider it the day after we pass it it
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actually has a boost for the economy. >> we have to leave it there, but thank you very much for joining us today. >> thank you, congressman. >> thank you very much. we'd like now to get the other side of this debate. the republican perspective and bring in congressman michael burgess. i'd like to ask you about how this deal is shaping up so far and whether or not in its current form it would be something that you could vote for. >> it doesn't look so on its face. but like everyone else, i am still trying to get to the details. you know, interesting about senator mccain's remarks, i was watching the president on television and the market ticker that was going by simultaneously right before the president spoke the dow was up almost 60 points. as soon as the president started to speak in his combative tone, the market dropped to 20. i mean, clearly it had an effect on not just senator mccain, not just me, but it had an effect to people watching from the floor of the nation's markets.
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>> well, it's clear, sir, that the market wants a deal of some kind. as it stands right now, the senate's talking about a tax increase for individuals making more than $450,000 to 39.6%. that sounds like the senate republicans have agreed to that. can you guys in the house agree to it? would you vote for that? >> i'm not sure that beyond one individual that senate republicans have agreed to that. look, this has been the hard part about this process. and certainly i have a lot of respect for congressman welch you just had on. but remember we're cut out of these negotiations. we're not part of it. it's behind a secret door. that's really the difficult part about all of this. if there's going to be a tax increase, i want to see every dollar of that tax increase go to deficit reduction. i don't want to see it pay for new programs. i don't want to see it pay for the president's pet projects. i want it to go for deficit reduction. but that's not what we're hearing. >> the sequestration delay that republicans would like to see a 30-day delay. take it to the march deadline
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for the debt limit. the democrats want to go further out. what would you accept? >> the sequestration was signed into law by the president 18 months ago. it takes effect january 2nd. it was an important part of the last debt limit discussion. there's no way in the world that you can play that forward to the next debt limit discussion. that just doesn't work. the sequestration has to go forward as it is written as the president signed into law. remember all of this, the tax piece, the sequestration and don't forget obama care taxes, all of those were things signed by the president. clearly he wanted this scenario, or he wouldn't have signed those pieces of legislation. >> i would like to push a bit more on bill's previous question about tax hikes. because if i'm not wrong and do correct me if i'm wrong, you have said before that you would not vote for the elimination of a tax cut for those making over 45 450k. that is what's on the table now. would you change your mind on that?
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>> i'm not going to fore close any possibility until i see what is really offered. but let's be honest. from the face of it, it looks like raises taxes in order to spend more money and get us into a deeper hole than we've been in already. this president is going to be sworn in for his second term in a couple of weeks. you guys are going to cover that. the national debt at that point will be over $16 trillion. when the next president is sworn in, that national debt will be over $22 trillion. there's your problem, ladies and gentlemen. that is our problem. >> thank you very much for joining us. >> thank you very much. >> two great guests. thank you for joining us. as we stand, goodness me, only about 13 minutes left before we ring the final closing bell of 2012. i'm going to say despite the fact we've got a lot of negative headlines, it's been a nice year for the markets. the dow up by over 6%. the s&p up by double digits. the nasdaq up 15%, maybe more.
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we'll get the later tallies later in the show. >> this market wants to go higher, they just need the good news. by the way, maria bartiromo may not be with us physically but she's always working. she's been talking to d.c. insiders and she will join us with some new insights a bit later. still to come. >> looking forward to that. and former dnc howard dean has been tells us to go over the cliff as the responsible thing to do. he will join us live. stick around on "closing bell." my eye on her... t but with so much health care noise, i didn't always watch out for myself. with unitedhealthcare, i get personalized information and rewards for addressing my health risks. but she's still going to give me a heart attack. that's health in numbers. unitedhealthcare.
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seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade. okay. moments from the closing of the trading year, it's a rally we got underway right now. let's check in with mary thompson here on the floor of the exchak. >> a good rally and an end to e the five-day losing streak as the dow looks to have a move to the upside 135 points. dow's up about 6% for the year. one of the reasons for that is the gains in bank of america, the best performing stock in the dow up over 100%. trading at a 52-week high today.
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hewlett-packard was the worst performer this year. getting hit because dell computer the worst performing in the s&p 500, that index up for the year. dell is down about 30%. though it is higher in today's session. best performer in the s&p 500, we have to look at the home builders. very strong year for them. then turning to the nasdaq composite, the best there was regeneoron. it had a strong performance this year. but trading to the downside were the for-profit education companies included apollo which operates the yurvet of phoenix. right now the dow's up 138 points. back to you. >> thank you very much for that. so with less than 20 minutes to go in the last trading session of 1202012, what do you need to know about 2013? >> he says there's some key factors that will offset any
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risk from the fiscal cliff. chris constantine sees more opportunity in the international market compared to the united states markets heading into the new year. they both join ugh us to break it down for us. john, we're all marveling in washington right now. >> the best deal would be if they got a deal that did something to correct the structural problems. but i think not going over the cliff is probably not good. it wouldn't have been that bad anyways. it would have gone back a day or two into the new year. >> what do you make of the market the fact it's up 140 points now and we don't have a deal yet? >> i think it's because the cliff talk was a bit like a magician's left hand. when he's doing the trick, he's distracting you with the left hand. i think things have been getting better internationally and domestically and we missed that because of what's going on with the cliff in washington. >> chris, what is it about the
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united states that makes you prefer international over domestic ones? >> first of all i agree with john that the u.s. market remains fairly attractive. the thing about international is a couple things. first of all, if you look at a broad index efa is stretched to the downside than historic levels. the s&p looks attractive. the other thing is the policy mandate in places like europe believe it or not for the first time in a really long time they actually may be clearer than the u.s. >> chris, is there something about the fiscal cliff, deal or no deal, that makes you concerned about u.s. equities versus international ones? >> well, yes. but i think it's a relative concern. because i think risk assets around the world are attractively valued right now. but you're absolutely right. regardless of what sort of deal
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we get today or in the next three months, the fact of the matter is it will have an adverse impact next year. the question is is it going to be bad enough to throw the country into recession or not? we suspect not. and you're seeing today that it looks like a -- that both political sides have been able to find common ground on the tax issue which we think is pertinent in erm thes of the economic impact. but having said that, again, the policy response we think in europe ever since draghi has been in has been consistent and very conducive to risk markets going up. >> john, they're talking about raising the capital gains from the current 15%. they were originally it's going to go to 40%. now they're talking 20%. much lower than anticipated. good for stocks? does that make it even more attractive to go into equities? >> i think so. the risk was going higher.
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i've got to say i'm not sure i would turn down any investment because i was only going to keep 80% opposed to 85% of return. >> that's better than 60%. >> much better. instead of 85%, i'd only keep 80%. that's not going to be a deal breaker in most cases. i think it's still reasonably low. >> i'll see you again in a few minutes. chris, thank you for joining us as well. mandy, as we head towards the close with eight minutes to go here, highs for the day the last closing bell of the year, the dow up 163 points now. >> also got a fantastic stat from our team. saying that gains on the final trading day of the year rare in recent years. today would be just the second time in the last nine years the s&p has risen on the last trading day. next all the details you need to know about the year that was to help you invest in the year that will be. and we're counting down the top five downloaded songs on
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itunes this year. number five, john's favorite. "pay phone" by maroon 5. >> i love this song. ♪ of person who sets goals and only hopes to achieve them. so you'll be happy to know that when it comes to your investment goals, northern trust uses award-winning expertise to lead you through an interactive investment process. adding precision to your portfolio construction by directly matching your assets and your risk preferences against your unique life goals. we call it goals driven investing. your life has a sense of purpose. shouldn't your investments? ♪ expertise matters. find it at northern trust.
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can to before investing. carefully
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. more breaking news on the fiscal cliff with our john
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harwood at the white house. what are you hearing, john? >> bill, i just spoke to a republican leadership source in the house of representatives who said the house will not be voting on any potential deal that the senate strikes today. the source said we're not voting on this in the dead of night. what that means is is that technically we will go over the cliff tonight without a legislative solution. the impact of that may not be great because if a deal comes soon after midnight tonight, that would forestall the changes in tax tables that would be the way in which ordinary taxpayers would see the effect of higher rates. and budget sequester talks won't happen in the first day or two of the year. this is significant though because there was some deal that a deal could be struck that could clear the senate on an expedited procedure and clear
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the house tonight. i'm now told there will be no house votes tonight which means as i said in a technical sense, we go over the cliff. >> good thing it gives them more time to thrash out a better deal than rather than just a deal to avert the deadline tonight? >> yes. and the fact that it's a holiday tomorrow probably helps to some degree and gives them some breathing home. the information i just reported isn't meant to suggest there will not be a legislative solution because i think they're on track to make that happen. but it is not going to come to fruition and be in a form that a president can sign by midnight tonight. >> did we actually think the house would be voting on something tonight? they can stop the clock and vote on it later. i guess the fear is that youp give them more time, then they bicker and bicker on more of the fine points don't they? >> yes, that's always the risk.
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and you heard senator mcconnell the republican leader come out on the floor and say let's vote now on the tax portion of the deal. and democrats are resisting because they want to deal with the sequester in a different way, a longer lasting way than republicans do. but whenever you think you have the votes and you want to vote as soon as possible to validate that deal. but to the extent that december 31st has been the trigger for the fiscal cliff and we wake up tomorrow on january 1st. if there's no new law, taxes will be higher tomorrow morning than they are tonight. >> what do you think was the straw that broke the camel's back leading to this position there will be no vote in the house tonight? was it perhaps the president's remarks this afternoon? did that slow the process down? >> some republicans complained about that, but i wouldn't say -- i don't think the camel's back has been broken. what i think is that as aat